Carbon Offsetting – Think Global, Act Local

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There can’t be many people left who still deny that the activities of mankind are having a profound and troubling effect on our planet. Scientists call this geological age the Anthropocene; an age in which human activity is the dominant influence on our environment and climate.

The UK was the first country in the world to announce that it will be net zero by 2050, and to enshrine this into law. We are all now having to play an element of catch-up upon realising what that actually means and, of course, at what cost. With some estimations for infrastructure investment requirements being in the range of £300Bn, you can be sure that we are all ‘in it together’.

The public sector has taken the lead with many local authorities declaring a climate emergency, and we are starting to see tender opportunities asking businesses about whether we track our own carbon footprint and the steps being taken to reduce it. This is only the start of things to come, and you can expect more stringent requirements as we develop our understanding.

So, whether we decide to take action because we want to tick the marketing box of ‘Green Ware’ or we take heartfelt initiatives because of ‘Green Care’, we need to act now for the sustainable benefit of our businesses, our society and the environment.

Considering the full menu of carbon offsetting solutions

After taking positive steps to reduce the organisational carbon footprint, any residual emissions can be mitigated through investing in certified offsetting schemes before declaring that the company is operationally net zero.

Once the decision to offset has been made, a quick internet search will show a myriad of alternative offerings at varying prices and you will also realise that it is a trader’s market, with new schemes emerging and old schemes closing as they become over-subscribed. Schemes range from a single wind turbine in Thailand, through to distributing efficient cooking stoves in developing countries, or capturing gas emissions from landfill sites – all sensible stuff.

However, whilst the practice of offsetting has been around for 50 years, it is only really the last 10-20 years that we have seen an acceleration of activity and the creation of a new industry sector which has inevitably led to some criticism and sharp practice. The theory of offsetting requires the proof of additionality to any savings which would have happened anyway, and not all schemes have delivered what they promised.

Thankfully there is now an element of market maturity, with the advent of internationally recognised verification standards such as the Gold Standard (GS), Voluntary Carbon Standard (VCS) and Clean Development Mechanism (CDM) amongst others.

However, by linking your action to other convergent market drivers, it is possible to get additional benefit and increase your chances of winning business by becoming a clean and green supply chain partner of choice.

Embedding net zero into the procurement process

The requirement for public sector contracts to have an increasing element of spend trickling down to SMEs is well understood, and many government departments have measures in place to ensure this happens. The most commonly used procurement frameworks such as Scape and Crown Commercial Services also have measures embedded which ‘encourage’ the development and reporting activity and spend within the SME supply chain.

If you can declare that you are a carbon net zero business, then you will have a relative increased benefit to your clients in comparison to others which aren’t. This is due to what the Green House Gas Protocol defines as Scope 3 emissions, those which occur in the value chain and that includes goods and services purchased.

Of course, the corollary of this is that you should look to your own Scope 3 emissions too, as enshrined by the recently published Cabinet Office guidance which applies to all Departmental procurement contracts with a minimum annual spend of £5m.

Specifically, the guidance – released in early June – calls for suppliers to complete a Carbon Reduction Plan (CRP) template report, and for this report to have a prominent link on the suppliers web site home page. It also suggests that any SMEs who are members of a bidding consortium should also have a published CRP.

Showcasing Social Value

Demonstrating the social value that can be gained from public procurement contracts is also gaining momentum. The Public Services (Social Value) Act which came into force on 31st January 2013 required for the consideration of what additionality could be gained from public sector procurement, and occasionally a small percentage of the award would be made on this basis in addition to the usual price and technical responses. Since then, the Cabinet Office has this year called for it to be a mandatory element of government department procurement with a 10% minimum score.

The point about Social Value is that there are documented model themes which the client can choose from, which includes SME spend and Fighting Climate Change. As a verified net zero SME supplier, you could be in higher demand.

The case for embracing local, nature-based solutions

When it comes to investing in an offsetting scheme, you could consider something more local than Thailand. Whist all properly accredited and verified schemes will have environmental and even social merit, something UK or preferably regionally based could be even more appealing.

Though it is difficult to quantify, but there is something more rewarding in making an investment in a tangible scheme you can feel physically close to. It is the same as we saw with community-owned energy schemes, where planning objections were far less frequent when locals had a share in its profits and locally-derived benefits.

It is the element of being able to demonstrably give something back to the community in which you live and work; the one which sustains your business and family. This is the same theory as making a donation to a local charitable cause or fundraising scheme that you have affinity for.

If there isn’t a local scheme, you could also consider being the catalyst to begin one. Carbon ‘insetting’, a new trend – and certainly a new term – is gaining favour. It is the notion that we could look within our own client and supply chain to develop a scheme that is compliant and satisfies the additionality tests that are necessarily required to be officially recognised by the verification standards schemes. It isn’t easy, but there are consultants who are able to work with you through the process.

Staying ahead of the curve

All the convergent links above are mutually supportive, especially when it comes to public sector procurement. A reduced travel footprint, guaranteed local job creation and local spend could trump larger national suppliers or at least make them look for local and credible suppliers. If you add to that making an investment in a regional carbon offsetting scheme with the enhances social, environmental and economic benefit that creates, you could truly have a very compelling sales proposition which has the added well-being benefit of doing the right thing for the right reasons.

Here at Tetra Tech, we are set on our net zero flight path and will shortly be setting our own science-based targets. We are already part of the snowball mentioned earlier, and we aren’t just doing it because our clients expect it of us. We are doing it because we believe it is the right thing to do.

[By Simon Sjenitzer, Energy & Net Zero Director at Tetra Tech]

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